Seeing the Light on Energy Efficiency

Common sense tells us that increasing energy efficiency reduces energy use. But this is not so. William Stanley Jevons first identified this paradox in his 1865 book, The Coal Question. Jevons observed that England’s consumption of coal soared after James Watt introduced his coal-fired steam engine, which represented a vast improvement on Thomas Newcomen’s inefficient design.

Jevons pointed out that efficiency gains reduce the cost of energy, allowing the steam engine to penetrate other industries, i.e., textiles. This lead to an increase in the total energy consumed. Jevons wrote, "It is wholly a confusion of ideas to suppose that the economical use of fuel is equivalent to a diminished consumption. The very contrary is the truth."

The increase in the use of household appliances bears this out. As appliances become ever more energy efficient, we use more of them. Survey data for 1980 and 2001 shows increases in microwave ovens from 14 percent to 86 percent, dishwashers from 37 percent to 53 percent, and central air conditioning from 27 percent to 55 percent.

Even though energy efficiency has improved in almost every aspect of our society, overall energy consumption continues to grow. Improvements in energy efficiency are good for the economy and for people’s lives, but it doesn’t mean we’ll use less energy overall. We’ll use more, especially in the developing world. In their 2005 book, The Bottomless Well, Peter Huber and Mark Mills wrote, "Efficiency fails to curb demand because it lets more people do more, and do it faster—and more/more/faster invariably swamps all the efficiency gains."

Founded 30 years ago in Bozeman, Montana, PERC—the Property and Environment Research Center—is the nation’s oldest and largest institute dedicated to improving environmental quality through property rights and markets.

The goal of PERC’s programs is to fully realize the vision of establishing “PERC University,” where scholars, students, policy makers, and others convene to expand the applications of free market environmentalism.

PERC's fellowships share a common goal of exposing new scholars, students, journalists, and policy makers to free market environmentalism, as well as enable scholars already familiar with FME to explore new applications.